The Coronavirus Outbreak: A Guide to The Impact on Student Housing
The impact of the coronavirus (COVID-19) is being felt across every sector of the U.S. economy as the virus continues to spread worldwide. The student housing industry is not exempt, as the number of colleges and universities canceling in-person classes continues to grow, with some requesting that students vacate residence halls immediately for the remainder of the spring semester.
The number of confirmed cases in the U.S. has climbed to 10,442 and the death toll has risen to 150 as of March 19, according to The New York Times coronavirus case map.
President Trump declared a national emergency on March 13, which gave him authority to use $50 billion allocated by congress for disaster relief to address the coronavirus crisis. The Trump administration broadened the government’s response to the pandemic on Wednesday, spelling out the first details of a $1 trillion economic package that requests an infusion of $500 billion for direct payments to taxpayers and $500 billion in loans for businesses from Congress, according to reports by The New York Times. President Trump also invoked a seldom-used wartime law that allows the government to press American industry into service to ramp up production of medical supplies.
University and College Closures
Universities are taking action in response to the coronavirus, with many across the country switching to online instruction. A number of schools are prohibiting students from returning to campus following spring break for several weeks. In some cases, this also means the closure of residence halls, with students expected to vacate for weeks or more until the spread of the virus has slowed.
The University System of Georgia is one of the latest institutions to temporarily suspend instruction. Classes at all universities within the system will be temporarily suspended for two weeks effective March 16. Harvard University has made the decision to switch to online courses, with students asked to leave their residence halls by Sunday, March 15.
In Seattle — one of the first states to report confirmed cases of coronavirus — the University of Washington has suspended classes on three of its campuses, with instructors being asked to hold classes and exams remotely until winter quarter ends on March 20. Similar protocols have been implemented at Seattle University, Seattle Pacific University and Northeastern University’s satellite campus in Seattle.
CNN has compiled a list of universities and colleges that have taken action against the coronavirus, which can be viewed here.
REBusinessOnline has compiled a list of resources for the commercial real estate industry, updated daily. From commentary on the economic impact to advice for property managers, the resources can be found here.
Impact to Off-Campus Housing
Student Housing Business — sister publication to REBusinessOnline — spoke with owners and operators of private housing within the industry on their response to COVID-19 over the course of the last few weeks. Many reported that communities and offices are remaining open. Several companies have either closed or are considering closing common area amenity spaces, like fitness centers, for the next few weeks. The Centers for Disease Control and Prevention (CDC) are recommending this sort of shared amenity closure, according to sources familiar with the present situation.
Chief operating executives of 26 leading student housing companies held a conference call on Thursday, March 12 to share best practices and tips. The call was spearheaded by Greystar’s Executive Director of Real Estate Operations for Student Housing Chris Richards.
Lease cancellations continue to be a tricky subject for owners and operators, especially in markets where universities are requesting that students not return following spring break. The majority of companies report that lease cancellations are not being permitted at current.
Nonessential maintenance requests are often being deferred in accordance with recommended social distancing tactics, and communication of both CDC recommendations for avoiding the virus and information on all changes within the community are being disseminated to student residents in a timely fashion.
DMG Investments will be rolling out a number of coronavirus protocols at its student housing properties in New York, Texas and South Carolina, which will include visitor health screenings; expanded measures to disinfect furniture, vending machines, drinking fountains, carpets and walls of common areas multiple times daily; and briefing tenants on crisis response plans in the event of an outbreak at their property.
“As the student housing industry grapples with how to respond to the pandemic, there is much uncertainty with how this will impact markets and leasing velocity,” says Christian O’Lone, regional property manager with DMG Investments. “Following a series of best practices for facilities maintenance, staff education and resident communication, we have been able to mitigate potential risk to our resident base.”
“Working closely with the primary universities in the markets that we serve, we have been able to accommodate on-campus residents that have been displaced due to campus closures,” he continues. “We are optimistic that this will not impact our fall leasing projections, and our communities continue to show results in preleasing numbers. The largest impact that the coronavirus is going to have will be on marketing outlets and platforms. More than ever, an excellent presence on social media and online marketing platforms will be a necessity for hitting fall preleasing targets.”
Companies like Dorm Room Movers — a provider of moving, storage and shipping services for college students — are offering free pickup of furniture and personal belongings for students who are forced to vacate their campuses due to university closure. U-Haul is also offering 30-day storage for free for college students who have been forced to suddenly move out of their residence halls, according to reports by CNN.
Preparing for the Days Ahead
The National Multifamily Housing Council (NMHC) released a report titled ‘COVID-19 Preparedness for Apartment Firms’ earlier this week, which suggests that owners and operators should take the following steps to prepare for possible exposure to the virus:
- Develop an incident response plan for possible COVID-19 exposure at apartment communities. Firms should create a ‘Crisis Team’ of senior executives and personnel from the corporate suite, risk management, human resources, legal, information technology and operations. These individuals will be tasked with providing communities the most up-to-date information regarding the pandemic and recommended procedures.
- Monitor and communicate with government officials. It is imperative for on-site staff and management in affected communities to establish and maintain contact with local and state health departments and disaster management authorities. On-site teams should learn how to access and use these resources. All firms should monitor the websites and social media of the CDC, local and state health departments and other public officials to remain current on the latest information.
- Timely employee and resident communication is key in multifamily settings. Accurate, timely and regular communications with employees, residents, suppliers and even the media are critical. Communities should make sure that they have all available contact information for staff, residents and suppliers and should develop alternative ways to disseminate information in case contact is disrupted. Staff should be instructed to inform firms if they know they have been exposed to the virus or if they are exhibiting symptoms of infection. They should also inform all employers if they have a household member with a particular vulnerability to the virus. All firms are also encouraged to post CDC resources in public areas to make residents and employees aware of the facts surrounding COVID-19.
- Establish protocol for employee leave, telework and travel procedures. Apartment firms should develop an employee leave policy that includes telecommuting, staggered schedules and liberal leave. Apartment operators should remain flexible and encourage employees to stay home when they are sick or need to care for a family member affected by the outbreak.
- Implement flu-specific continuity plans and site controls. The CDC recommends that corporate emergency preparedness plans include specific provisions addressing the impact of a pandemic flu on their employees. This might include increasing the frequency and thoroughness of cleaning in common areas and of frequently touched items like elevator buttons, door handles and intercom panels.
- Craft a plan for potential lapse in services and supplies. With the potential loss of staff and on-site personnel, most apartment communities will need to scale back or curtail services. It may be necessary to implement online-only leasing and prioritize online rent payment. Apartment operators should also work with residents who may fall behind on rental payments due to loss of income or lack of access to their financial accounts during a widespread COVID-19 outbreak. Communities should also anticipate high absenteeism with suppliers and service providers, which might create disruptions in trash removal, utility service, transportation or supply delivery.
- Understand legal liability and obligations. The spread of COVID-19 could raise a host of legal issues that must be analyzed in advance to reduce company liability. Consider liability sources such as resident illness, employee exposure to sick residents, evictions and employee leave scenarios. Apartment firms should consult with counsel and review applicable local, state and federal laws and regulations on what is required of your firm during an outbreak to ensure you’re in full compliance. Firms should clearly articulate and distribute any changes to leave or disability benefit policies in advance to ensure uniform application.
To read the full report by NMHC, click here. REBusinessOnline — sister publication to Student Housing Business — is actively compiling reports from the commercial real estate industry to help readers find the information they need. Reports are organized by relevance and timeliness, and can be accessed by clicking here.
— Katie Sloan